Friday, January 28, 2005

Technology threats to advertising breach newsroom walls

This is a very convincing article on how newsrooms' staffs need to understand the new business model of the newspaper industry. Thanks to Robert Niles and the Online Journalism Review for this analysis: "Technology that allows advertisers and readers to better connect continues to drive economic changes in the news business. The Internet hammered the newspaper classified business over the past decade, and now new technology for placing display advertising on Web sites promises to challenge remaining news industry business models. Many journalists don't give much thought to what happened on the other side of "the wall." But advertising pays the bills – including reporters' salaries – in almost all news organizations. And changes that interrupt the flow of money from advertisers to publishers ultimately result in less cash for newsrooms.

"If a newspaper had umpteen million dollars in revenue from employment advertising, which was the most lucrative category of advertising at newspapers, bar none, and that category has dropped by 40, 50, 60, 80 percent -- that has a significant impact on everything at the newspaper," said industry analyst Peter Zollman, founding principal of Advanced Interactive Media Group...

So are traditional news organizations doomed to watch their top lines evaporate? Not if the people working for them can change and help develop their own new methods to serve readers and advertisers.

"Don't think the old way is going to be enough for survival," Zollman warned. "The mistake of the average journalist is to say I don't want to have to deal with this stuff ? I'm a 'pure journalist.'

"Well, there's a lot a very exciting and very pure journalism in interactive media, and great opportunities to learn and increase your value to your company ... and to increase your value to you."